Why Amazon FBA is Becoming a Popular Side Hustle
By David Oberlander – August 3, 2022
With the increase in living expenses, many are looking for side hustles or side businesses and gigs to supplement their income. From buying products at a discount in retail stores, sourcing high-demand goods from Alibaba, or selling items that reflect their hobby and passion, countless IG reels and Tiktok videos showing how to make money on Amazon FBA are popularizing the business model. Here’s why many employed people are starting an Amazon FBA business as their side hustle.
Flexible Working Hours: One of the great features of having an online business is the flexibility in working hours, and selling on Amazon is no exception. The most significant portion of your time spent being an Amazon seller is sourcing and setting up the listing, which can be done during any part of the day as it fits your schedule. The only part of the business with time constraints is responding to customer messages, but at a 24-hour reply-by time frame requirement, this is manageable for most full-time employees.
Remote Working: The second great feature of having an online business is the ability to work anywhere you want, as long as the internet is available. Since Amazon fulfills all your products, you don’t need to be packing and shipping things out at your warehouse. This is a dream come true for those who enjoy working in their PJs all day.
Work at Your Own Pace: When it comes to selling on Amazon, the time required to run your business is correlated to how many products you add or have. As mentioned before, most time spent operating this side hustle is at the beginning of listing the product (sourcing, photoshoot, copywriting, PPC, etc.), so in essence, the fewer products you add to your catalog, the less work you have to do.
Scalability: You’re doing well on Amazon, feel you’ve got the golden ticket product, and are looking to expand. What’s great about Amazon is that you can easily set up to sell your products in other marketplaces worldwide. Currently, Amazon also offers FBA in Germany, United Kingdom, France, Italy, Spain, Canada, Australia, Singapore, Japan, and the Middle East. Once you get a shipment in the FBA warehouse, you’re up and running, selling your products like a multinational.
Low Fixed Cost: Another great perk of an online business is the low cost of investment and fixed cost. Most of your expenses, such as logistics and related Amazon fees, are variable. You don’t need to pay for a retail or office location or hire staff to manage order fulfillment. The only investment to prepare for is the inventory and your time.
If the opportunity presents itself, don’t hesitate to explore starting your own Amazon business. I suggest focusing on a category you are passionate about over doing something trendy. This way, you see the side hustle as less of a job and more of a hobby. From my experience, business owners who are passionate about their business are more likely to succeed than those driven purely by financial motivations.
Amazon FBA 101 FAQ
What is Amazon FBA?
Fulfillment by Amazon (FBA) is a service that allows businesses that have a merchant account on Amazon to outsource order fulfillment to Amazon. Companies send products to Amazon fulfillment centers, and when a customer makes a purchase, Amazon picks, packs, and ships the order on behalf of the business. Amazon also provides fulfillment-related customer service and can process returns for those orders.
How to open an Amazon FBA account?
First, you must register for an Amazon seller account. This free and relatively straightforward process requires detailed information about your company (or individual), location with proof of address, and possibly an online identification interview. Here is the link for more information on becoming an Amazon FBA seller. https://sell.amazon.com/beginners-guide
What is the process of shipping inventory into an Amazon FBA warehouse?
First, your products must exist in your Amazon catalog. After, you can select the items you wish to send to Amazon. Amazon will then assign a warehouse location of their choice based on your product and shipping location. You may use your own logistics, Amazon’s Partner Carrier (U.S. only), or Amazon Global Logistics if shipping from China, to send your goods to their warehouse. Once your shipment is sent, you will get an update when the FBA warehouse has processed your shipment.
What is Amazon FBA pricing?
If you are using FBA, Amazon has two charges, a referral fee, and a fulfillment fee. The product category determines the referral fee, but most categories are at 15% of the sale price. The fulfillment fee is by the product type, size tier, and shipping weight. This is a multidimensional cost structure, so using their Revenue Calculator or referring to their fee structure chart when doing your product analysis is best.